Tech giants are coming for your wallet, and all the data inside it

The end (of cash) is nigh.
The end (of cash) is nigh.
Image: Reuters/Maxim Zmeyev
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This week, Apple—you couldn’t help but hear—reached $1 trillion in value. With market caps greater than $800 million each, Google and Amazon aren’t far behind. Yet despite valuations approaching or exceeding the annual GDP of the Netherlands, tech giants are not content to stand still. (Nor will investors let them.) Having disrupted everything from music to media to retail, their next target is as close as your back pocket.

Already, analysts at Morgan Stanley have identified payment businesses like Visa, PayPal, and Worldpay as better bets for investors’ portfolios than tech stocks. But tech giants are keen on becoming payment businesses themselves. Earlier this week, Apple CEO Tim Cook said Apple Pay transactions hit 1 billion in the second quarter, triple what they were a year ago. Research firm Bernstein analyzed whether it would make sense for Amazon to leap into the $57 trillion global asset-management industry—and the short answer was yes. Facebook’s WhatsApp is trying to roll out payment services in India and it supports banking in Africa. On earnings calls, bank executives field a lot of questions from analysts about the threat of Apple, Amazon, and the like to their core business.

That’s in part because Big Tech is already inexorably intertwined with our daily lives. We carry powerful computers in our pockets everywhere we go, accessing social media, search, email, and other services at little or no cost. Adding financial transactions to the equation could be an obvious efficiency for consumers. 

But there’s a risk. As concerns grow about how our personal data is being used by tech companies, the leap into finance will give these enterprises another abundant trove of information. Banks probably have the “richest data pool” of any sector, Barclays CEO Jes Staley pointed out last year. If tech companies get control of payment systems, BlackRock president Robert Kapito noted, they’ll know “every single thing you do.”

This isn’t to suggest ignoring the promise Big Tech has to offer the often staid and sluggish financial industry. But given what’s been revealed about how these companies manage other sorts of information, entrusting tech firms with deeply personal financial details raises the stakes for getting things right the first time, and not trying to fix them after they break.